If your organization pursues federal infrastructure funding — or works with contractors who do — you've likely heard the term "Buy America" thrown around. But as federal domestic content requirements have expanded and tightened in recent years, many procurement managers and project engineers find themselves asking the same questions: What exactly does BABA compliance mean for electrical components? Which projects does it apply to? And how do you actually verify that the parts you're buying meet the requirements?

Getting this wrong isn't a minor administrative inconvenience. Projects that fail Buy America audits can lose federal funding, face significant penalties, and experience costly delays. On the other hand, procurement teams that understand BABA requirements and work with the right domestic manufacturing partners gain a real competitive advantage in pursuing federally funded contracts.

This guide breaks down everything you need to know about Build America, Buy America (BABA) compliance as it applies to electrical components — from what the law requires to how IFL Manufacturing helps customers stay confidently compliant on every project.

What Is BABA — Build America, Buy America?

The Build America, Buy America Act (BABA) was enacted as part of the Infrastructure Investment and Jobs Act (IIJA) in November 2021. It significantly expanded and strengthened the domestic content requirements that apply to federal infrastructure spending in the United States.

BABA builds on a long history of Buy America legislation, including the Buy American Act of 1933, the Buy America provisions of the Surface Transportation Assistance Act of 1982, and the Federal Transit Administration's (FTA) longstanding Buy America requirements. However, BABA is broader in scope and applies to a wider range of federally funded infrastructure projects than previous requirements.

The Core Requirement

At its heart, BABA requires that all iron, steel, manufactured products, and construction materials used in federally funded infrastructure projects must be produced in the United States. This applies to federal financial assistance — grants, loans, and other funding — for infrastructure projects across a wide range of sectors.

Key Definitions Under BABA

Iron and Steel Products: All manufacturing processes must occur in the United States, from initial melting through final rolling, casting, or other manufacturing processes.

Manufactured Products: The product must be manufactured in the United States, and the cost of components manufactured in the United States must exceed 55% of the total cost of all components. This threshold increases to 60% beginning in 2024, and 65% in 2029.

Construction Materials: Must be manufactured in the United States — meaning all manufacturing processes for the material must occur domestically.

How BABA Differs from Previous Buy America Requirements

Previous Buy America requirements applied selectively — primarily to transit, highway, and a handful of other infrastructure categories. BABA dramatically expanded coverage to include virtually all federally funded infrastructure, including:

  • Surface transportation (highways, roads, bridges)
  • Transit
  • Aviation
  • Ports and waterways
  • Water infrastructure
  • Broadband
  • Power infrastructure and electrical grid upgrades
  • Environmental remediation

This expansion means electrical components that were previously exempt from Buy America requirements may now be subject to BABA provisions depending on their intended use.

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BABA Requirements for Electrical Components

Electrical components fall under the "manufactured products" category of BABA, which establishes specific requirements for domestic content.

The Manufactured Products Standard

For electrical components to be BABA-compliant as manufactured products, two conditions must be met:

1. US Manufacturing: The product must be manufactured in the United States. This means the final manufacturing process that transforms components into the finished product must occur domestically.

2. Domestic Component Costs: The cost of US-manufactured components must exceed 55% of the total cost of all components used in the finished product (rising to 60% in 2024 and 65% in 2029).

This two-part test applies to custom electrical components including enclosures, control panels, busbars, mounting hardware, cable assemblies, and other electrical equipment used in federally funded infrastructure projects.

What "Manufactured in the United States" Means

The phrase "manufactured in the United States" has specific meaning under BABA. It requires that the final manufacturing process for the product occur in the US — not merely final assembly or packaging. Importing partially completed components and performing minor finishing operations in the US is generally not sufficient to meet this standard.

For custom electrical components, this means:

  • Machining operations must be performed in the US
  • Fabrication including cutting, forming, and welding must occur domestically
  • Assembly of components into finished products must happen in the US
  • Testing and quality control performed in the US

At IFL Manufacturing, all manufacturing operations — machining, fabrication, assembly, finishing, and testing — are performed at our US facilities, fully satisfying the domestic manufacturing requirement.

Component Cost Calculation

The domestic component cost threshold requires careful tracking of component sourcing. For a custom electrical enclosure, for example, the calculation would consider:

  • Steel sheet metal (source and cost)
  • Hardware — screws, hinges, latches (source and cost)
  • Paint or coating materials (source and cost)
  • Gaskets and sealing materials (source and cost)
  • Any sub-components or assemblies (source and cost)

When the total cost of US-sourced components exceeds 55% of the total component cost (rising to 60%), the component cost test is satisfied.

Our procurement processes prioritize domestic material sourcing to maximize the domestic content percentage in our products and provide customers with clear documentation of component origins.

Waivers and Exceptions

BABA includes provisions for waivers when domestic products are unavailable, insufficient in quantity, or would result in unreasonable costs. The Office of Management and Budget (OMB) has established a waiver process, and individual federal agencies can grant waivers under specific circumstances.

However, waivers are not guaranteed and should not be assumed. Designing projects with compliant domestic components from the outset is far preferable to pursuing waivers after the fact.

Which Projects Require BABA Compliance?

Understanding which projects fall under BABA requirements is essential for procurement planning. The answer depends on the source of funding and the nature of the infrastructure.

Federal Financial Assistance

BABA applies to projects receiving "federal financial assistance" for "infrastructure." Federal financial assistance includes:

  • Grants
  • Cooperative agreements
  • Loans
  • Loan guarantees
  • Other forms of federal support

Projects funded entirely with state, local, or private funds are generally not subject to BABA requirements, though they may be subject to other Buy America requirements depending on the funding mechanism.

Infrastructure Projects Covered

The IIJA defines "infrastructure" broadly to encompass:

Transportation Infrastructure

  • Highways, roads, and bridges receiving federal-aid highway funding
  • Transit systems funded through FTA programs
  • Aviation projects funded through FAA programs
  • Port and maritime infrastructure funded through federal programs

Energy and Power Infrastructure

  • Electrical grid upgrades and modernization projects
  • Power transmission and distribution projects receiving federal funding
  • Renewable energy projects receiving federal financial assistance

Water Infrastructure

  • Water treatment and distribution systems
  • Wastewater treatment infrastructure

Broadband Infrastructure

  • Projects receiving funding through federal broadband programs

Environmental Projects

  • Remediation projects receiving federal environmental funding

State and Local Projects with Federal Funding

Importantly, BABA applies at the project level — not just to direct federal construction. State departments of transportation, transit agencies, municipalities, and utilities that receive federal grants or loans must comply with BABA requirements for their projects, even though they are not federal agencies themselves.

This means that electrical components purchased by a transit agency for a federally funded station renovation, or by a utility for a federally funded grid modernization project, must comply with BABA requirements.

Contractor Obligations

Prime contractors working on federally funded infrastructure projects are responsible for ensuring that materials and components incorporated into their work comply with BABA. This compliance obligation flows down to subcontractors and suppliers.

If you supply electrical components to contractors working on federally funded projects, your customers may require BABA compliance certifications for your products. Our BABA compliance manufacturing and documentation capabilities support your customers' compliance needs.

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How to Verify BABA Compliance

Verifying BABA compliance requires documentation at multiple levels — from raw material sourcing through finished product manufacturing.

Supplier Certifications

The foundation of BABA compliance verification is a chain of certifications from suppliers. Compliant electrical component manufacturers should be able to provide:

Certificate of Compliance: A formal written certification that the product was manufactured in the United States and meets applicable domestic content requirements.

Bill of Materials with Sourcing: Documentation of all components used in the product, their country of origin, and their cost — supporting the domestic component cost calculation.

Material Certifications: For steel and iron products, mill test reports confirming US origin of raw materials.

Manufacturing Records: Documentation confirming that manufacturing operations were performed in the United States.

What to Look for in Supplier Certifications

When evaluating BABA compliance certifications from electrical component suppliers, look for:

  • Specific references to BABA/IIJA requirements rather than generic "Made in USA" claims
  • Quantified domestic content percentage demonstrating compliance with the applicable threshold
  • Identification of the responsible party — the person or organization certifying compliance
  • Date of certification — confirming it covers the period of manufacture
  • Scope of certification — confirming it applies to the specific products being purchased

Vague claims like "assembled in USA" or "domestic manufacturer" without supporting documentation may not satisfy BABA compliance requirements.

Project Compliance Reporting

Federal agencies and grant recipients typically require compliance certifications to be submitted as part of project documentation. Requirements vary by agency and program, but generally include:

  • Contractor certifications of Buy America compliance
  • Supporting documentation for any waivers obtained
  • Records available for audit by the federal agency or inspector general

Maintaining organized compliance documentation throughout a project is essential for passing audits and protecting federal funding.

Third-Party Verification

Some federal programs require or encourage third-party verification of Buy America compliance. Working with manufacturers who maintain robust quality systems and documentation practices simplifies any third-party verification process.

Benefits of BABA-Compliant Components

Beyond simply meeting federal requirements, specifying BABA-compliant electrical components from domestic manufacturers provides real operational and strategic advantages.

Project Eligibility and Funding Security

The most immediate benefit is straightforward: BABA compliance keeps your project eligible for federal funding. With billions of dollars of infrastructure investment flowing through federal programs, the ability to access this funding is enormously valuable.

Projects that run into Buy America compliance problems risk losing grant funding, facing project delays while waivers are sought, and damaging relationships with federal funding partners. Specifying compliant domestic components from the outset eliminates these risks.

Quality Assurance

Domestic manufacturers operate under US quality management standards, workplace safety regulations, and professional engineering practices. This regulatory environment tends to produce consistent quality outcomes that may be harder to achieve with overseas sources.

USA-based manufacturers also design to American standards — UL, NEC, ANSI, IEEE — ensuring components are appropriate for US electrical installations and code requirements.

Supply Chain Reliability

As global supply chain disruptions have demonstrated, international supply chains can be unreliable. Domestic manufacturing provides:

  • Shorter, more reliable supply chains with fewer potential points of failure
  • Elimination of international shipping delays and port congestion risks
  • Reduced exposure to currency fluctuation and international logistics cost volatility
  • Faster response to urgent or unplanned component needs

Communication and Collaboration

Working with domestic manufacturers simplifies communication and collaboration:

  • Same time zone communication enables real-time problem resolution
  • Site visits to manufacturing facilities are practical for quality reviews or project discussions
  • Shared language and business culture reduce miscommunication
  • Responsive support during normal business hours

Supporting American Manufacturing

Specifying BABA-compliant domestic components directly supports American manufacturing jobs, skilled trades, and the communities where manufacturing facilities operate. For public agencies and contractors working on public infrastructure, this alignment with domestic economic development goals has both practical and political value.

IFL Manufacturing's BABA-Compliant Process

At IFL Manufacturing, BABA compliance isn't an afterthought — it's built into how we operate. Our USA-based manufacturing and domestic sourcing practices position us as a reliable partner for customers whose projects require compliant components.

100% USA Manufacturing

All manufacturing operations at IFL Manufacturing are performed in the United States. Our capabilities include:

  • CNC machining and precision fabrication
  • Sheet metal fabrication and forming
  • Welding and assembly
  • Surface finishing and coating
  • Testing and quality inspection

Every step of the manufacturing process — from raw material receiving through final inspection and shipping — occurs at our domestic facilities. This fully satisfies the BABA requirement that products be manufactured in the United States.

Domestic Material Sourcing

We prioritize domestic sourcing for the materials used in our custom electrical solutions. Our procurement processes actively identify and qualify US-based material suppliers to maximize the domestic content of our products.

For steel, aluminum, copper, and other primary materials, we work with US mills and distributors. For hardware, fasteners, and other components, we source domestically wherever possible.

Compliance Documentation

We provide customers with the documentation needed to demonstrate BABA compliance in their project reporting:

Certificates of Compliance: Formal written certifications that products were manufactured in the United States and meet applicable domestic content requirements.

Bills of Materials with Sourcing: Detailed documentation of components, their origins, and cost data supporting the domestic content percentage calculation.

Material Certifications: Mill test reports and material certifications confirming domestic origin of primary materials.

Manufacturing Records: Documentation of manufacturing operations confirming US-based production.

This documentation package gives customers confidence in their compliance status and supports project reporting requirements.

Partnering on BABA Requirements

We work proactively with customers to understand their specific BABA requirements — which vary by federal program and agency — and ensure our documentation meets their project needs. If your project has specific compliance documentation formats or requirements, we'll work with you to provide what you need.

Our BABA compliance capabilities extend across our full range of products, including industrial components, precision-machined parts, electrical system parts, and custom solutions.

Learn More About Our BABA Process

Cost Considerations: Domestic vs. Imported

A common concern about Buy America requirements is the cost impact of domestic sourcing versus international alternatives. The reality is more nuanced than a simple cost comparison suggests.

The True Cost of Overseas Sourcing

Initial purchase price is only one component of the total cost of sourcing electrical components internationally. A realistic comparison must account for:

Shipping and Logistics Costs: International freight, customs clearance, import duties, and domestic transportation add meaningful costs that may not be reflected in quoted prices.

Lead Time Costs: Longer supply chains require larger safety stock inventories, tying up working capital and increasing storage costs.

Quality Risk Costs: Quality problems with overseas components may not surface until products are in use, creating warranty costs, rework expenses, and potential project delays.

Compliance Risk Costs: Using non-compliant components on federally funded projects can result in losing project funding — a cost that dwarfs any component price savings.

Supply Chain Disruption Costs: Supply chain disruptions can halt projects and create emergency procurement situations that are far more expensive than planned domestic sourcing.

Communication and Coordination Costs: Managing overseas suppliers requires additional time and resources for communication, quality oversight, and logistics coordination.

When Domestic Manufacturing is Cost-Competitive

For custom electrical components — as opposed to high-volume commodity products — domestic manufacturing is often cost-competitive or even less expensive than overseas alternatives when total cost is considered. This is particularly true for:

  • Small to medium quantities: Overseas manufacturers often have minimum order requirements that make small runs uneconomical.
  • Complex components: Engineering-intensive custom work benefits from proximity and close collaboration.
  • Short lead time requirements: Domestic sources can often deliver faster without premium expediting costs.
  • Time-sensitive projects: Project schedule value often exceeds the cost premium of domestic sourcing.

BABA Compliance Waivers: Not a Cost Solution

Some procurement managers consider pursuing BABA waivers as a way to use lower-cost international components on federally funded projects. This approach has significant risks:

  • Waivers are not guaranteed — applications may be denied
  • The waiver process takes time that may not be available in project schedules
  • Waiver decisions can be challenged by domestic manufacturers
  • Approved waivers may be narrower in scope than anticipated
  • Waiver availability may change as domestic manufacturing capacity develops

Building BABA compliance into your procurement planning from the start is far more reliable than depending on the waiver process.

Common BABA Compliance Mistakes to Avoid

Even well-intentioned procurement teams make mistakes with BABA compliance. Understanding common pitfalls helps you avoid them.

Mistake 1: Assuming "Made in USA" Labels Are Sufficient

Federal Trade Commission (FTC) "Made in USA" standards and BABA compliance requirements are not the same thing. A product can legitimately carry a "Made in USA" label under FTC standards while not meeting BABA's specific requirements for domestic content percentage and manufacturing location.

Always obtain BABA-specific certifications that reference the applicable statutory requirements — not just general domestic content claims.

Mistake 2: Ignoring BABA Until After Procurement

Discovering that specified components don't meet BABA requirements after procurement is underway creates difficult choices: pursue waivers, find compliant alternatives at premium cost, or risk funding compliance. Identifying BABA requirements and qualifying compliant suppliers early in the project planning process avoids these situations.

Mistake 3: Not Flowing Down Requirements to Suppliers

Prime contractors sometimes focus on their own BABA compliance without ensuring that suppliers and subcontractors understand their compliance obligations. BABA requirements must flow down through the supply chain — components purchased from non-compliant sources cannot be made compliant by a domestic prime contractor.

Mistake 4: Inadequate Documentation

Even when components are genuinely BABA-compliant, insufficient documentation can create compliance problems during audits. Ensure suppliers provide comprehensive, project-specific compliance documentation — not just generic product data sheets.

Mistake 5: Misidentifying Product Categories

BABA has different requirements for different product categories — iron and steel products, manufactured products, and construction materials each have specific standards. Misidentifying a product category and applying the wrong compliance standard is a common error with significant consequences.

Mistake 6: Overlooking Component-Level Compliance

For complex assemblies, BABA compliance requires that individual components — not just the finished assembly — meet domestic sourcing requirements. An assembly manufactured in the US but containing predominantly imported components may not satisfy the domestic component cost threshold.

Mistake 7: Not Preparing for Audits

Federal agency audits of Buy America compliance do occur, and project records may be examined years after project completion. Maintaining organized, retrievable compliance documentation throughout the project lifecycle protects against audit findings.

Partner with IFL Manufacturing for BABA-Compliant Electrical Components

Navigating BABA compliance doesn't have to be complicated when you work with a manufacturing partner that understands the requirements and builds compliance into every product they make.

IFL Manufacturing's custom electrical solutions are manufactured entirely in the United States, with domestic material sourcing and comprehensive compliance documentation. Whether you're procuring components for a transit capital project or a utility infrastructure upgrade, we provide the products and documentation you need to maintain confident BABA compliance.

Ready to discuss your BABA-compliant component needs?

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